Tesla developing even cheaper car to slot below Model 3

Elon Musk claims \"everyone will be able to afford\" the smaller fourth-gen car.

Tesla Motors chief executive Elon Musk suggests the company is working on an even cheaper car to slot below the Model 3.

"I'm super excited about being able to produce a car that most people can afford," Musk said at a recent Future Transport Solutions conference in Oslo. "And there will be future cars that are even more affordable down the road."

The executive suggests the Model 3's $35,000 price tag accommodates middle-class buyers, making it within reach of "roughly half" of potential buyers.

"With fourth-generation and smaller cars ... we'll ultimately be in the position where, I think, almost everyone can afford the car," he added.

The company has previously claimed that electric vehicles must provide a range of at least 200 miles to be competitive with gasoline- or diesel-fueled alternatives. If battery prices continue to slide, Tesla could eventually make profit from a sub-$30,000 vehicle that does not compromise the 200-mile minimum range.

A cheaper model is unlikely to arrive in the next few years. Tesla will presumably focus its immediate efforts on meeting the late-2017 delivery target for the Model 3, and quickly ramping up production to fulfill the 400,000 pre-orders that have already been submitted.

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